Vietnam Rubber Group finishes construction on its $5.2M rubber factory

[geovalin]

Charles Rollet

Vietnam Rubber Group has inaugurated its first latex processing plant in Cambodia, according to Vietnamese media reports.

The plant, which cost $5.2 million after two years of construction, was reportedly inaugurated in Ratanikkiri’s O’Yadav district on December 23 in a ceremony which included Cambodian Deputy Prime Minister Yim Chhay Ly, Vietnamese business weekly the Saigon Times reported on December 24.

The latex will be extracted from rubber trees planted on almost 45,000 hectares of rubber plantations in the border province, the Saigon Times said

The news comes as worldwide rubber prices fell 21 per cent from May to November, going from $94 to $74 per pound.

“Because of the news [of falling prices] circulating globally, somehow it’s going to slow down some of the investors [in Cambodia] who may consider investing in other crops like pepper,” said Men Sopheak, director-general of the Chop Rubber Plantation, one of Cambodia’s major rubber exporters.

However, while low rubber prices meant smaller rubber companies may scale back their investments, larger ones, such as VRG, could afford to invest for the long term, Sopheak said.

“VRG can afford to make these changes, because they are doing well for themselves [in Cambodia],” Sopheak said.

VRG’s new Cambodian plant will use entirely Vietnamese equipment, and marks VRG’s first foray into latex processing in Cambodia, according to an announcement on its website.

VRG could not be reached for comment.

No stranger to controversy, VRG was accused by NGO Global Witness in 2013 of “driving a land-grabbing crisis” in Cambodia and Laos, along with another Vietnamese rubber company, Hoang Anh Gia Lai or HAGL.

VRG announced this August a complaint resolution scheme which it said would resolve such disputes within 30 days.

In November, a government audit found the state-owned company had lost nearly $391 million in state funds in a five year-period, including $22.75 million from a Cambodian rubber plantation in Kratie.

http://www.phnompenhpost.com/business/vietnam-rubber-group-finishes-construction-its-52m-rubber-factory